Primary statutory liability for excise arrears survives third-party payment arrangement; revenue recovery upheld for unpaid dues.

An arrangement under which a third party undertook to pay excise arrears did not discharge the assessee's primary statutory liability under Rule 173RD because acceptance of part payment was only a mode of receipt, not a novation or release. As the arrears remained unpaid, recovery as arrears of land revenue was lawful, and the plea of estoppel failed. The assessee therefore continued to be liable for the outstanding excise duty, and revenue recovery proceedings were sustained.

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Issues: Whether an arrangement permitting a third party to pay excise arrears discharges the assessee's primary liability, and whether recovery of the outstanding duty through revenue recovery proceedings was lawful.

Analysis: The assessee had been assessed to pay a flat-rate excise duty under Rule 173RD of the Central Excise Rules, 1944, and had acknowledged the liability. A subsequent arrangement by which a third party undertook to remit the arrears did not extinguish the assessee's underlying obligation to the State. The acceptance of part payment from the third party was treated as only a mode of receiving payment and not as a novation or release of the assessee from liability. Since the arrears remained unpaid, the department was entitled to seek recovery as arrears of land revenue.

Conclusion: The plea of estoppel failed, and the assessee remained primarily liable for the excise arrears. Recovery through the Revenue Recovery Act was upheld.

Final Conclusion: The writ petition was dismissed, and the department's action to recover the unpaid excise duty from the assessee was sustained.

Ratio Decidendi: Acceptance of a third party's undertaking to pay excise arrears does not absolve the assessee of its primary statutory liability unless the dues are actually discharged.

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